Create a Company Wealth Map
Your business must do more than make money; it should increase in value and lead you to financial independence.
By: Chia-Li Chien | Published 06/02/2010
Many people start their business with a business plan, perhaps for the purpose of getting initial funding from financial institutions or investors. But those plans are designed for lenders, not for business owners. They don't tell business owners how to create value within their business for themselves.
I conducted a "why are you in business?" poll for my book, Show Me the Money. About two-thirds of respondents said they are in business because they want to make more money and become financially independent. But a business plan really doesn't address this. Many business owners do create a lifestyle for themselves from their business. But few double or even quintuple the value of their business. That's because most don't have that big picture or road map to guide them.
A "company wealth map" is a road map to guide you in terms of creating wealth or value for you from your business. In layman's terms, it's how you visualize your ultimate financial independence. Granted, every one of us has a different definition of financial independence. The company wealth map is the big picture showing you how your business can work for you.
"I am so good at seeing the big picture, visualizing the future--doing everything toward how the end product looks," says Kelly Gaines, the owner of Charlotte Aquatics. Unlike most business owners, Gaines intuitively knows what her big picture is, writes down all of her goals and monitors them on a regular basis. She has that mental picture of her company wealth map.
Many business owners wait until they hit a wall or get stuck before they do something. For the most part, they know there is something missing, yet they can't verbalize what that is. Although a company wealth map is not a magic wand, it certainly serves a purpose as far as guiding business owners to realize their financial independence.
To create a company wealth map, consider the following:
1. Revisit your business model. Many business owners have plenty of passion when they start their business. However, passion alone can't generate dollars. A business model should align well with:
* Talents or core competency
* Economic drivers
Try to write down what they are in your business, and work on your answers for a couple of days to clarify your business model. Remember, you need to maintain your flexibility and be sure everything makes sense and is totally aligned.
2. What is your marketing strategy? Your ultimate goal is pull marketing. You want your customers to come to you instead of you chasing them. There's no secret here; you have do enough traditional push marketing, and you have to do it consistently, to achieve pull marketing. Take advantage of newer technologies, such as social networking, pay-per-click and opportunities such as association sponsorships.
3. Know your numbers and monitor them on a weekly basis. Many business owners check their profit-and-loss statement only during tax season. That's too late. Part of the reason they don't check regularly is because their accounting is outsourced to their accounting firm or CPA firm. Often they are at the mercy of the outsourcer to provide an accurate and timely P&L report. However, just checking the P&L is not enough. Each business should have three to four essential numbers or key performance indicators to track on a regular basis. Work with your team to define the set of numbers and indicators you need, and take action if the numbers are over or under your projections.
4. Enlist a professional management team. We as business owners should work ourselves out of the "boss" role. Many business owners say, "My team runs my business while I am on vacation." But not many have a professional management team in place to take the company to the next level. Evaluate your current team to see if you're missing one or two crucial roles, such as vice president of sales, COO, CFO, etc. You can't afford to have your business outgrow your team.
5. Maximize your intellectual properties. "I am creating a process that I can duplicate and [use to] open up my second location," Gaines says. Obviously, Gaines understands how important it is to capture intellectual property, not only to streamline her internal processes, but also to leverage them to gain many revenue streams in the future.
Gaines is a smart, hard-working business owner who has her dad and her husband as mentors to guide her. Her husband is a savvy, successful commercial real estate developer. Her father advises, "Don't sit when you can stand, don't stand when you can walk, don't walk when you can run." Gaines has the total package to make her successful.
Take time to create your own company wealth map; it can guide you, too, toward your financial independence. Click here to download a sample Company Wealth Map.
Chia-Li Chien, CFP®, CRPC, PMP; helps women entrepreneurs to convert their business into meaningful personal wealth. She is the author of Show Me The Money and columnist for WomenEntrepreneur.com & Fox Business online. She is available for consulting, speaking engagements and workshops. She can be reached at www.chialichien.com or firstname.lastname@example.org.
Women Entrepreneur Magazine URL:
Fox Business online URL:
Copyright 2010 by Entrepreneur.com, Inc. All rights reserved.